Ninety-one percent of companies in the S&P Global 100 Index see extreme weather and climate change impacts as current or future risks to their business, but many struggle to translate long-term, global climate data into short-term and local risks, according to a new report by the Center for Climate and Energy Solutions (C2ES).
Despite growing access to climate-related data and tools, companies say they need “actionable science” that helps them to understand locally-specific risks or risk scenarios.
Released last week during Climate Week NYC, Weathering the Next Storm: A Closer Look at Business Resilience, examines how firms are preparing for climate risks and what is keeping them from doing more. It also suggests strategies for companies and cities to collaborate to strengthen climate resilience.
The new report synthesizes public disclosures by S&P Global 100 companies, in-depth interviews and case studies, and workshops. It updates a 2013 report that provided a baseline for how companies were assessing their climate vulnerabilities.
Companies worry about climate impacts beyond their facilities, the report says. Almost all firms interviewed expressed concern about impacts to their supply chains and public infrastructure. Likewise, many view climate change as a “threat multiplier” that exacerbates existing risks. This puts climate change into a familiar context, the report says, but could cause companies to overlook or underestimate the threats they face.
C2ES recommends that businesses start with a limited-scope vulnerability assessment. For example, focusing on the most critical parts of the business to raise internal awareness of climate risks.
Firms also should facilitate regular communication across departments involved in climate risk and resilience — including sustainability, risk management, operations and finance — and consider whether to change planning horizons to better incorporate climate risks.
Companies, state and city governments, non-profits and local experts should explore partnerships to analyze data, evaluate climate risks, undertake cost-benefit studies and implement resilience planning.
C2ES also says governments can play an important role to facilitate climate change action in the private sector. Governments should look for ways to streamline climate risk reporting and provide more guidance on how to incorporate climate risks into financial disclosures. They also should improve public infrastructure and provide opportunities for the private sector to contribute to resilience planning efforts and investments.
Cities also are key actors in the global effort to mitigate climate change. Last week, 10 cities presented ambitious climate action plans in accordance with the planning and reporting requirements of the Compact of Mayors. Buenos Aires, Cape Town, Copenhagen, Melbourne, New York City, Oslo, San Francisco, Stockholm, Sydney and Washington, D.C. joined Rio de Janeiro on the list of cities to meet the Compact compliance milestone.